Yesterday’s shooting was another case that we have seen far too often, unfortunately, for the rest of the non-gun toting members of society. The suspect in Thursday’s shooting at a Maryland newspaper was identified as Jarrod Ramos, born Dec. 21, 1979, according to three senior law enforcement officials.

Another tragic incident, this time, with at least five people killed and several others “gravely injured” during a shooting at the offices of the Capital Gazette newspaper in Annapolis, Maryland, law enforcement officials said. Ramos was charged with five counts of first-degree murder in the shooting and his bail review is scheduled to be held at 10:30 a.m. ET Friday.

For investors, traders, asset managers, the implications are many; Recently, it was reported by researcher Sustainalytics that an estimated 24 percent of the world’s exchange-traded funds and 15 percent of mutual funds have holdings in firearms companies.

Both BlackRock and Vanguard, recently, have begun to question firearms makers after  various, recent, shootings including the one in the Florida high school. This one in Maryland will further raise the debate as to the asset managers holding gun makers accountable on their safety practices.

For market participants (asset manager, investors and traders), stock prices of gunmakers often rise after mass shootings on the theory that people will stockpile weapons in anticipation of tougher gun-control laws. Most market participants prefer to see alpha rather than not as smart or fast money is supposed to capture alpha.

Empirically, the Las Vegas shooting resulted in the firearm-related stocks beginning to rise. Olin Corp., the maker of Winchester ammunition, rose 6 percent by noon New York time. American Outdoor Brands Corp., formerly Smith & Wesson Holding Corp., and Sturm Ruger & Co.were up about 4 percent. Similarly, following the Pulse nightclub shooting in Orlando, Fla., last summer, which left dozens dead, Sturm Ruger and Smith & Wesson saw stock prices increase. The same phenomenon occurred after the San Bernardino, Calif. shooting in late 2015, which left 14 dead.

However, recent changes in the Oval Office, have changed the direction with which sales of gun makers react following a shooting. For market participants, a Trump legislation, which has been previously supported by the NRA, indicates that sales may not rise as normally as they have used to as consumers no longer feared gun control legislation. As such, some might benefit by using counter intuitive thinking when participating in the markets.

ETFs in this space include some of the following:

  1. SPUN
  2. ITA
  3. IJS
  4. VIOV

 

 

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